Budget 2024: Delicate balancing act by government testament to stability, growth
The government's decision to maintain existing tax rates ensures fiscal stability and predictability for businesses and individuals.
Navigating the intricate journey of presenting an interim budget in the lead-up to general elections presents a formidable challenge. The incumbent government, under the astute stewardship of Honourable Finance Minister Nirmala Sitharaman, has adeptly managed to navigate this challenge. Striving to steer clear of overly populist measures that could jeopardize fiscal prudence, the administration has also remained attuned to the citizenry's needs and ambitions. This has resulted in a delicate balancing act, culminating in a budget that stands as a testament to stability, growth, and the government's unwavering dedication to inclusive development.
In a strategic move to convey a strong message of fiscal stability and predictability, the government has wisely decided to maintain the existing rates for direct and indirect taxes, including export duties. This decision is pivotal in ensuring that the economy continues on its trajectory of recovery and growth, thereby providing a sense of security and continuity for businesses and individuals alike.
The government has taken a bold step by elevating the capital expenditure for FY25 by 11% to ₹11.1 lakh crore, a significant increase from the ₹10 lakh crore earmarked in the previous budget. This move unequivocally underscores the government's resolve to fortify infrastructure development as a cornerstone for sustainable economic growth. This critical investment is set to catalyse growth across a plethora of sectors, ranging from construction to technology, thereby not only generating a multitude of employment opportunities but also invigorating economic activity nationwide.
By judiciously adjusting the fiscal deficit to 5.1% of GDP for FY25, the Finance Minister has reaffirmed the government's commitment to prudent fiscal management. This is crucial not only for maintaining investor confidence but also for ensuring the long-term economic stability and health of the nation. Additionally, the launch of initiatives aimed at assisting the middle class in homeownership and the expansion of healthcare coverage via the Ayushman Bharat scheme for ASHA and Anganwadi workers marks a significant enhancement of the social safety net. These measures address some of the most pressing welfare concerns, reflecting the government’s sensitivity to the needs of its citizens.
Emphasizing the government's focus on women's economic empowerment, the ambitious goal to increase the number of 'Lakpati Didis' is noteworthy. This initiative is not just about financial inclusion; it represents a broader recognition of the potential of women entrepreneurs as catalysts for economic transformation. Substantial investments in infrastructure development reflect a visionary and strategic approach. This approach is aimed at leveraging assets to fund future growth initiatives, thereby enhancing India's global connectivity and competitiveness without compromising fiscal health.
The substantial allocations for supporting research and innovation in the private sector represent a forward-thinking investment in India's future. These initiatives, coupled with efforts to achieve self-reliance in oilseeds and providing support for dairy farmers, reflect a comprehensive approach to agricultural and rural development. This ensures sustainability and resilience in these crucial sectors. Furthermore, the plans to encourage states to develop and globally market iconic tourist centres are a testament to the untapped potential of India's rich cultural heritage. This strategy not only promises to boost tourism but also preserves and promotes India's diverse cultural fabric.
As we look to the future, the 2024 Interim Budget lays a solid foundation for optimism and reflects a confident and fiscally prudent government. It is a budget that skillfully balances fiscal responsibility with the imperative for growth. It aims to empower the vulnerable while fostering innovation, and it underscores a steadfast commitment to inclusive development.
The author, Mehul Pandaya is Managing Director and Chief Executing Officer, CareEdge Ratings
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Business NewsEconomyBudget 2024: Delicate balancing act by government testament to stability, growth
First Published:5 Feb 2024, 12:43 PM IST
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